Monday, April 25, 2011
Category:
Home Improvements
According to new research by Halifax, renting a property is typically 14 percent more expensive than buying a home in the UK. In March of this year, the average monthly cost associated with buying a three bedroom house in the UK reportedly stood at £608 – £98 less than the average monthly rent paid on a property of the same type. In contrast, it has been pointed out that the average cost of buying a property was 43 percent more than the typical rent paid three years ago.
Halifax has revealed that the ‘significant fall’ in the monthly cost associated with buying a home compared to renting a property has been ‘driven by the decline in the average mortgage rate since 2008’. It was found that new borrowers are today looking at an average mortgage rate of 3.59 percent compared to 5.82 percent in March 2008, which has assisted in reducing the average monthly mortgage payment by 39 percent.
The research also uncovered that the costs of buying a home now account for a lesser proportion of average UK disposable income than rental payments, at 27 percent and 31 percent respectively. However, in 2008, buying costs reportedly accounted for a larger proportion of average disposable income than renting at 56 percent and 39 percent respectively.
Although there has been an improvement in the affordability of buying compared to renting, findings have shown that many prospective buyers have not attempted to enter the market due to the ‘tightening in lending criteria since 2007’.
Housing economist at Halifax, Suren Thiru, commented: "The typical monthly mortgage payment has declined by over a third since 2008 as a consequence of falling mortgage rates and lower house prices. As such, the fall in the cost of buying a property compared to the average rent paid by tenants has been significant. Such a marked decline in mortgage costs has improved affordability for those able to enter the market as well as helping to ease the pressure on existing homeowners' disposable income.
Although the current trade-off between buying and renting is expected to narrow when interest rates start to rise again, the long-term benefits associated with investing in bricks and mortar are likely to ensure that buying will continue to be viewed favourably by many."
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Those who have recently moved from rented accommodation to their own home, and who are looking for finance to put their personal stamp on it, could consider taking out a secured loan. One of many finance options available, a secured loan for
home improvements could allow borrowers to embark upon an array of projects in and around their property. For example, if extra living space is desired, a conservatory could be invested in. Alternatively, unconverted attic space could be transformed into an extra bedroom or useful office. Furthermore, borrowers may wish to maximise any outdoor space that they have acquired by means of a landscaping project, in readiness for the forthcoming summer months.
